The Sad State of Grid R&D

My last columnintroduced the Grid Modernization Collaborative, an ad hoc team of grid groups trying to pull in the same direction.  This month, we will discuss whether the nation’s research agenda is fostering or impeding progress.

Research today: who and how much?

Many people comment that there are too many different grid-related organizations. Yet there are even more organizations involved in uncoordinated grid R&D projects.

Kurt Yeager, President Emeritus the Electric Power Research Institute (EPRI) told me recently that the utility industry slipped another notch last year in the rankings for percentage of total revenues spent on R&D. It currently stands at 0.2% – below the dog food industry. I guess you could say our bark is worse than our bite.

Of the roughly $24B annual Department of Energy budget, about $120M is allocated to grid research. (One half of one percent!) This compares to the multiple billions assigned to generation and end use. This says something about our national assumption that the grid will just always be there. If our national leaders realized that the grid issues are as important as the generation and end use issues, we might see the billion-dollar grid R&D budget needed to generate focus and results.

By comparison, the European Union (EU) has a grid research agenda at roughly $336M annually, plus an Intelligent Energy Europe (IEE) program at about $980M this year. And the telecommunications industry is spending about $6B over the next three years to rollout its next big transformation, WiMAX. This despite the fact that the telecomm industry is smaller than the electric power industry. (Our national phone bill is less than half our national power bill.)

Is the U.S. R&D agenda too narrow or too broad?

When I ask international colleagues about the U.S. grid research agenda, comments range from lack of focus to insufficient funding to reach a critical mass. Our severe limitation on national R&D coincides with the virtual elimination of R&D at most large utilities (often directed by state utility commissions).

By comparison to other capital-intensive U.S. industries and to the European electric industry, our research agenda appears too narrow. However, when we look at the total number of research projects funded with the $120M from DOE OE, another $60M from California, and $5M from New York, we see an average R&D project size under $1M.  This implies a bevy of small R&D efforts and a very broad agenda.

Most people agree that U.S. grid research has lots of fingers in the pie.  Some people blame congressionally-directed funds (earmarks), but I think it goes much deeper than this.

Are there any bright spots?

While few, there are some bright spots.  California’s efforts to push advanced metering into reality are notable.  The DOE OE Distributed Systems Integration (DSI) program is getting off the ground -- the first research program that focuses on an integrated solution and recognizes that there are no “silver bullets.” And over the past two years, there has been positive movement by the DOE and the California Energy Commission (CEC) to coordinate research projects. This is great leverage.  Also, anytime you get more minds in the room debating the direction research should take, the outcome will be better.

The industry could stand a good dose of R&D focus and infusion of funds on par with other energy sector research spending, for at least a decade.  If we work very hard, maybe we can move ahead of the dog food industry next year.

Next month, we will discuss how to pay for modernizing the nation’s grid.

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   Steve’s previous column on a Grid Collaborative